Turkey central bank holds key rates after inflation bump

ISTANBUL: Turkey’s central bank left its key interest rates on hold for the third straight meeting on Thursday, keeping monetary policy tight after annual inflation rose back into double digits last month. The bank kept its late liquidity window, the highest of the multiple instruments it uses to set policy, at 12.25 percent and the benchmark repo rate at 8 percent.

Turkey’s central bank is tasked with balancing its fight against inflation pressures with regular calls for cheaper credit from President Tayyip Erdogan. Erdogan, who wants banks to lower the cost of credit to stimulate borrowing and bolster the economy, has described himself as an “enemy” of interest rates. The central bank’s resistance to lifting the repo rate has triggered concern among investors over the extent of its independence in the face of criticism from Erdogan.